Teardown Reveals PlayStation 4 Costs US$381 to Build

Research firm IHS has just dismantled a PlayStation 4 to look at its components, and AllThingsD had an earlier look and estimates that it costs Sony roughly US$381 to build each PlayStation 4 console.

Considering that the console retails for US$399 in the United States, this means that the margin on each console is just a mere US$18, which is unusual for consumer electronics. For instance, Apple's new iPad Air is believed to cost around US$274 to assemble and yet retails for a minimum of US$499, leaving Apple with a hefty US$225 margin.

On the flip side, let's remember that when the PlayStation 3 was first launched, Sony sold each of it at a loss. Back then it was believed that each PlayStation 3 console cost around US$805 to build and yet retailed for just US$599.

That said, we do fully expect manufacturing costs of the PlayStation 4 to come down in the future as Sony streamlines and perfects its operations. And it is also worth mentioning that it is absolutely crucial for Sony to get these consoles into as many homes as possible to establish market share to attract developers and for future games.